Inflation is falling: Can rates go down on a sustained basis?

In normal times, a Consumer Price Index (CPI), measured inflation coming below the central bank’s target, would have been a cause for celebrations that borrowing costs could slide on a sustained basis. Unfortunately, these are not normal times for monetary policy makers. CPI inflation for February at 3.6% against the target of 4% is music to ears. The repo rate at 6.25% appears too restrictive for a slowing economy, and there is little doubt